Worldwide: Government, Public Sector

The U.S. Court of Appeals for the D.C. Circuit has upheld a Department of War determination that Anthropic poses a supply chain risk under FASCSA, adopting a broad interpretation that does not require hostile intent. This landmark ruling permits DOW to exclude Anthropic products from defense contracts based on the AI company's training methodology and safety guardrails, potentially reshaping how government contractors approach AI integration in federal contract performance.

A U.S. House Committee on Ways & Means hearing on “Foreign Influence in American Nonprofits” last month and recent letters by Republican state Attorneys General accusing specific organizations of violating FARA have resulted in some additional public attention about how FARA relates to the nonprofit/tax-exempt sector.

The Trump administration lifts sanctions on Eritrea as Ethiopia's conflict with the Tigray People's Liberation Front reignites, threatening regional stability across the Horn of Africa. As the fragile peace collapses and rebel alliances form, the potential for broader proxy warfare involving Eritrea, Gulf states, and neighboring countries raises critical questions about US strategic interests and the effectiveness of sanctions diplomacy in preventing humanitarian catastrophe.

California has enacted comprehensive legislation requiring data center developers to disclose water usage and demonstrate supply adequacy before obtaining permits. These new laws impose water supply assessments, efficiency reporting, and drought contingency planning obligations that fundamentally reshape the regulatory landscape for data center development in the state.

On October 2, a community banking trade association filed a lawsuit against the OCC in the U.S. District Court for the District of Columbia, challenging the agency's authority to grant national trust bank charters to cryptocurrency companies. The complaint alleges that the OCC exceeded its authority under the National Bank Act (NBA) and violated the Administrative Procedure Act (APA) by permitting institutions that neither accept deposits nor primarily engage in fiduciary activities to obtain national trust bank charters.

The U.S. Department of Justice has announced significant revisions to its Justice Manual affecting False Claims Act enforcement, particularly regarding the use of guidance documents in civil and criminal actions and the dismissal of qui tam lawsuits. These changes reinstate 2017 policies while adding substantial new detail about when and how DOJ may rely on sub-regulatory guidance in enforcement proceedings, and signal a potentially more active approach to evaluating whether private whistleblower actions

Congressional appropriators face mounting challenges as FY27 budget negotiations stall while the federal debt surpasses $40 trillion. The White House's attempt to reshape NIH grant decisions through political appointees sparked immediate pushback from key lawmakers, raising fundamental questions about executive authority over congressionally mandated funding processes.

As the US and China compete for primacy in space, the stakes extend far beyond national pride. The race to establish infrastructure beyond Earth—from orbital manufacturing to lunar resource extraction—will determine which companies and countries build and profit from the next economy, and on what terms everyone else can access it.

Senate appropriators signal that meaningful action on FY27 spending bills is unlikely before the election, while the House Appropriations Committee shifts focus to oversight hearings. Congressional Republicans continue discussions on reconciliation and debt limit strategies, though prospects for action during the lame-duck session remain uncertain as agencies begin FY28 budget planning.

FinCEN's September 2026 Financial Trend Analysis examines $17.5 billion in suspicious activity reports related to health care fraud, revealing critical patterns in Medicare, Medicaid, and private insurance payments. The analysis demonstrates how financial institutions can distinguish between suspicious transactions and proven fraud while improving their investigation methodologies. Understanding these patterns helps compliance teams build more effective transaction monitoring systems without conflating repo

Financial institutions face new questions about accepting state-issued mobile driver's licenses and other government-issued verifiable digital credentials under customer identification programs. The September 2026 guidance from FinCEN and federal banking agencies clarifies when banks and credit unions may rely on these digital credentials, but leaves critical implementation decisions about technology, validation, and reasonable-belief standards to each institution.

FinCEN has reissued its Geographic Targeting Order requiring money services businesses along the U.S. southwest border to report cash transactions between $1,000 and $10,000. What compliance obligations do affected MSBs face, and how does this order fit into the broader federal strategy against cartel-linked money laundering?